The quick answer is because the other radio stations do not broadcast 100% of their over-the-air programming on the internet. In almost all cases, they separate at the commercial breaks and run either fill music or commercials that are locally produced and do not employ announcers or actors that are members of the American Federation of Television and Radio Artists (AFTRA). Many have a completely separate automated music service that they stream over the internet, playing the same music that they play on the air but without the simultaneous content of the terrestrial signal.
AFTRA is the national union that represents performers that appear on television and radio programs and commercials. Early in the lifetime of internet radio station streaming, AFTRA took the position that their master contract, to which almost all national advertising agencies are signatory, did not include performace over the internet. AFTRA maintains that streaming over the internet constitutes a performance of the work that is separate and distinct from performance over the air. AFTRA believes that their members are entitled to additional compensation for that additional performance.
As a result, national advertisers began stipulating in their ad buys that the commercials they placed could not be included in radio station audio streams. This had enormous operational and logistical implications.
The immediate impact on us was profound. Our streaming provider at the time, Yahoo! Broadcast, the successor to Broadcast.com, Mark Cuban’s company, terminated their contract with us rather than run the risk of us streaming them an AFTRA commercial which could lead to Yahoo! being named in a suit.
The capital outlay necessary to install a system that will automatically separate the audio streams when a commercial break starts is not supported by the potential revenue. I simply decided that the costs far outweighed the benefits.
And that led me to develop the model that you now see. We limit our streaming to those who are already entitled to hear our audio over the air. We use audio streaming as an enhancement to our terrestrial signal, making it easier to hear the station in workplaces and buildings that are not structurally friendly to radio. The subscription simply provides a mechanism for us, via the billing zip code of a credit card, to establish legitimate residency within our ARBITRON-defined metro area (ARBITRON is the national research firm that conducts radio station ratings). It’s not about the fee for us. We do not keep it. We donate it to the Boys & Girls Clubs of East Texas.
We are taking the position, so far unchallenged, that simply repeating our audio signal on the internet within the geographic area we are already licensed to serve, and having an auditable mechanism to prove that, does not constitute performance over the World Wide Web and thus does not infringe upon the rights of AFTRA performers or anyone else.
Eventually, as the internet continues to grow in importance within the advertising industry, the “AFTRA problem” will probably be sorted out in a way that works for everybody.
In the meantime, however, for us it is either this model or no streaming at all.
Thanks for your interest and I hope I have answered your question.
Paul L. Gleiser